AN EVALUATION OF THE IMPACT OF EFFECTIVE DISTRIBUTION SYSTEM IN AN ORGANIZATION

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AN EVALUATION OF THE IMPACT OF EFFECTIVE DISTRIBUTION SYSTEM IN AN ORGANIZATION

(A case study of Unilever Plc. Jos)

ABSTRACT

The purpose of this research work is to give an insight on the need for effective distribution system in an organization taken Unilever Plc. As a case study. The firm’s effort would be fruitless if their products fail to get to the utmost users at the right time, right place, and in the quantity. This however, goes to suggest that distribution is an important element in the marketing mix. The researcher tried to research on the problems of effects distribution in an organization which in most cases has to do with the poor road network, inventory control, material handling, transportation, warehousing and communication but few. The researcher equally tried to look at the importance of effective distribution system in an organization. One of the bases this research work is for organization to understand the effective distribution system, significantly increases organization sales volume. In order to check the validity of the subject matter, data were gathered using both primary and secondary data collection method. A well-constructed questionnaire as dispatched out to respondents (i.e. staff of Unilever Nigeria Plc. Jos) which were dully collected within four days of dispatch. The  data collected was tested using the chi-square, test statistics and at the end it was discovered that effective distribution system is vital to an organization as a tremendous effect on organization that ants to achieve its objective must design an effective distribution system that would make goods and services available to ultimate users at the right  time, right place and in the right quantity and a well distribution system will increase the volume of sales and profits for the organization, retention of potential and existing and good image for the organization.      

CHAPTER ONE

INTRODUCTION

1.1   STUDY BACKGROUND

Business activities have contributed greatly to the creation of affluent society. Place (distribution) is one of the marketing mix variables which mainly concerned with getting goods to the end users at the right place and at the right time. The task of distribution is to make physical goods available to buyers; this however, bridges the gaps of space and time between production and use consumption. Distribution can be viewed as a strategic managerial system since it is one component of the firms marketing mix. Thus, all the distribution activities, decision, choice of channels, distributor’s selection, and logistic decisions and so on are made to be consistent with the other aspects of the marketing programme. Distribution as one of the marketing mix plays a vital role and is basically regarded as one of the essential features of product distribution system in business organization with the fact that, production is not compete until the product and services rendered gets to the final consumers.

Physical distribution or logistics is concerned with the efficient movement of raw materials from suppliers, and finished goods from the end of the production line to the customer. A number of associated activities must be performed: they are grouped under four main categories called physical distribution activity centres, namely transportation inventory, warehousing and communication. The inadequacies of marketing systems of developing economics are most glaring in the area of physical distribution and one frequently hears of distribution “bottleneck” impeding the development of such economies. The important issue will be dealt with in this study pack.

A starting point in the design of a physical distribution system by the producer is to set a customer service standard this includes a number of dimension and the most important is the time it takes to get the merchandise to the customers, that is delivering time. It happens that decisions that lead to cost reduction in one activity area, such as transportation may lead to a cost increase in another area like inventory. As appropriate strategy in logistics designs therefore, it is arrange all the required activities so as to minimize the total cost of providing a desired level of customer’s service.

Physical distribution is of great important to most firms because it accounts for 20-22% of the retail price. Part of these costs goes for movement of product and the remaining part is related to inventory holding although distribution cost vary by industry. With the above importance task distribution, the researcher is prompted to verify more on the impact of effective distribution and suggest other possible ways of distribution in an organization or firms.

1.2   HISTORICAL BACKGROUND OF UNILEVER NIG PLC

According to Unilever annual report, the Unilever Nigeria Plc is the longest serving manufacturing outfit in Nigeria. The company was incorporated as a private company in 1923. Over years, the company diversified and expanded its production and marketing of personal products mainly toilet soap, non-soapy detergents, food and personal product including tooth paste, body cream, lotions baby care and hair care product.

In particular and through selected acquisition, the company has strengthened its foothold in food and personal products through its merger with Lipton Nigeria limited in 1985, Chessbrong products limited in 1988 and 1995 through a merger with lever brother Nigeria limited, which effectively sustained focus in management, the company now has four manufacturing sites for its operation from the original six viz, Apap the premier and targets site, product soaps such as sunlight, key, oxbar, Lux and astral and some personal products mainly toothpaste.

The second oldest site, Aba is devoted to the products of soapy detergents provider and bars. The third and nearest of the plants, commissioned in 1993, is the ultra-modern food factory in Agbara, where the company produces Royco, Blue Band, Planta Oryo among others and off course the fourth, theOregun site where popular personal product brand like Elida,

Pears, satin, Sheen, Lotion etc. are produced. It is intended to consolidate all the personal products production including tooth paste, ponds and Vaseline range of this site ultimately.

1.3   STATEMENT OF PROBLEM

A company or organization that places its goods at the right time and place and with the right support service is able to sell more than competitors who fail to observe or accomplish these goals. But over the years, organizations have been trying in one way or the other to bring about an effective distribution system but all to no avail. In Nigeria and perhaps throughout the world, the importance of effective distribution cannot be over emphasized. However, market firms have been greatly affected by structural problems such as transportation, warehousing, inventory management etc. which need to be addressed.

1.4   OBJECTIVE OF THE STUDY

The magnitude of the problems associated with the importance of effective distribution in an organization has reached an unacceptable proportion as many sectors of the sectors of the society and consumers begin to show negative attitudes towards it.

The principal objective of this research is to:

1. Assess the importance of effective distribution with particular reference to Unilever Nigeria Plc.
2. The significance of effective distribution system in Unilever Nigeria Plc.
3. Assess how products are been distributed.

1.5   SIGNIFICANCE OF THE STUDY

The researcher hopes that findings of this study will enable the management of Unilever Nigeria Plc to decide and design a better effective distribution system that will however, increase the volume of sales and profit for the organization1 The study will also enlighten the staff and management of Unilever Nigeria Plc on the importance of effective distribution system in an organization. The work could also be used as source of secondary data for future researchers.

This study pack can also be useful to students of Marketing, Business Administration and those of the related discipline, public oriented organization as well as any member of the public who has interest in knowing about effective distribution system.

1.6   SCOPE OFTHE STUDY

Because of the diverse nature of marketing activities, the work in this study pack was limited to the subject matter, “The Impact of effective distribution system in an organization”

1.7   LIMITATION OF THE STUDY

The researcher limited the study within Unilever Nigeria Plc Jos, and due to time constraint, the researcher based his findings on published materials and information from staff of the organization. Financial constraint is another reason that force the researcher not to extend his research’ outside Unilever Nigeria Plc. The researcher also encountered hitches in trying to get hold of some document due to security reason.

1.8   STATEMENT OF HYPOTHESIS

A hypothesis is a tentative statement of plausible assumption, the validity of which is yet to be known. Here statement of reasonable assumption is made and latter subject to test. The study shall test the following hypothesis:

H_i:    Effective distribution system significantly increases organization sales volume.

H_o:   Effective distribution system does not increase organization sales volume.

1.9   DEFINITION OF TERMS

Distribution: This is the movement of goods from the point of production and the finished product to the final or ultimate users.

Promotion: These are basis used by the management to promote the standard of product for profit maximization. It could also be an advertisement or special attempt to sell something.

Marketing: Marketing is define as human activities that are directed at satisfying needs and wants through exchange process.

Marketing mix: This is the cardinal point of all marketing activity. They are called the 4ps, product, price, promotion and place (distribution).

Media: These are means through which information’s are passed to the public. They include Television, Radio, New paper and magazines.

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